Possible tax hikes to cover the cost of Covid-19 vaccines

SA Health department looks for 20bn to vaccinate the entire population




As many countries around the world are already in the process of distributing the Covid-19 vaccine, the National Treasury of South Africa is proposing the possibility of increasing taxes as a means to fund the biggest vaccination procurement in the history of the country.

As the number of infections and deaths increase daily, the health department is looking at a whopping R20bn that is needed in order to vaccinate the entire population of South Africa. Treasury director-general Dondo Mogajane candidly stated in an interview published by Business Day, that “SA will not take us seriously if I can find money for SAA but not for vaccines”.

"But where will the money come from?"

As South Africa already missed the deadline for the deposit, philanthropic organization, Solidarity Fund came to the rescue, paying the 15% deposit of R327bn for the Covax vaccine. Solidarity Fund is supported by South Africa’s richest individuals and biggest companies. At this time, the health department is searching all avenues in order to bridge the 85% gap remaining.

Government is able to make provisions under section 16 of the Public Finance Management Act, which could mean the reprioritization of government spending and allow funds outside of the budget to be appropriated in times of emergency, such as this one.

Government is also looking at increasing alcohol taxes in order to close the gap. But Vinpro, a non-profit company representing 2500 South African wine producers, cellars and industry stakeholders has rejected this proposal, stating that the wine industry is already in crisis as a result of the lockdowns and any additional taxes would only constrain them even further.

 

When can we expect the vaccine?

According to President Cyril Ramaphosa, South Africa will receive the first batch of 1.5 million vaccination shots from AstraZeneca Plc, which is expected to arrive later this month. This will be the first of 20 million doses to follow.



This entry was posted in TaxTim's Blog and tagged , , . Bookmark the permalink.




Submit your tax return right here!

TaxTim will help you:

 Do Your Tax Return Easily
 Avoid penalties
 Maximise your refund

Tim uses your answers to complete your income tax return instantly and professionally, with everything filled in in the right place.

Let Tim submit your tax return direct to SARS in just a few clicks!

Get started

Blog Categories


Ask TaxTim

Got a question you want answered about tax?

Visit our helpdesk →

Get SARS Tax Deadlines in your Inbox
We'll tell you when you need to file, along with tax tips and updates.